The Right Way to Budget for IT

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Are you budgeting properly to make sure you’re getting the best possible return on your information technology investment?

We all know how important information technology is when it comes to staying competitive and agile in an increasingly fast-paced marketplace, however, many companies struggle with budgeting because they lack a meaningful planning and ongoing management process.

IT Budget

Here’s how you’re able to simplify information technology budgeting and make sure you get the best possible return on your information technology investment:

  • Create a formal budget based on your technology roadmap

Do you have a technology roadmap in place? If not, that’s the first step you need to complete. A technology roadmap takes into account any goals and objectives you’ve set, as well as any challenges you’re facing, then sets a list of priorities for you to follow, in order to operate more efficiently.

Once you have a technology roadmap in place, you need to create a formal budget that’s realistic and takes all priorities into consideration – the technology roadmap keeps you from making any investments that aren’t well thought out.

  • Review the formal budget vs. what’s actually spent quarterly

It’s not enough to simply create a formal budget – and it’s not worth spending the time creating a formal budget if you’re constantly going over it. Make sure you’re reviewing the formal budget vs. what’s actually being spent on a quarterly basis to see where you’ve overspending.

If you review the formal budget vs. what’s actually being spent on a quarterly basis, you’re able to find areas you need to reduce costs – and see what’s not bringing you enough value for what you’re spending.

  • Keep the formal budget at 3-6% of the operating budget

Most business owners are confused as to what an appropriate amount of money would be to spend on information technology – and they often don’t know if they’re allocating enough funds or too much funds. If you don’t have a clear vision for what you should be spending, aim for 3-6% of the operating budget.

When you keep your formal budget at 3-6% of the operating budget, you’re able to ensure you’re not spending an excessive amount on information technology – instead simply spending the right amount to see true business value.

CITOC knows the importance of meaningful planning and ongoing management when it comes to information technology budgeting. Call us at (713) 490-5000 or email us at info@citoc.com to discover how we can help you!

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